The annual returns for a portfolio. Introduction: Return is a loss or gain incurred on the investment made by the investors. It is expressed in terms of percentage.

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Question

Chapter 11, Problem 14P

a)

Summary Introduction

To determine: The annual returns for a portfolio.

Introduction:

Return is a loss or gain incurred on the investment made by the investors. It is expressed in terms of percentage.

b)

Summary Introduction

To determine: The lowest annual return of the portfolio and comparisons between the lowest annual return of the individual stock or portfolios.

Introduction:

Portfolio refers to a set of financial investments owned by the investor. The portfolio of investments includes debentures, stocks, bonds, and mutual funds.

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Using the data in the following table, consider a portfolio that maintains a 60% weight on stock A and a 40% weight on stock B. a. What is the return each year of this portfolio? b. Based on your results from part (a), compute the average return and volatility of the portfolio. c. Show that (i) the average return of the portfolio is equal to the (weighted) average of the average returns of the two stocks, and (ii) the volatility of the portfolio equals the same result as from the calculation in Eq. 11.9. d. Explain why the portfolio has a lower volatility than the average volatility of the two stocks. a. What is the return each year of this portfolio? Enter the return of this portfolio for each year in the table below: (Round to two decimal places.) Year 2012 Portfolio % 2010 % 2011 % b. Based on your results from part (a), compute the average return and volatility of the portfolio. The average return of the portfolio is%. (Round to two decimal places.) 2013 % 2014 % 2015 % The…

Using the data in the following table, LOADING... , consider a portfolio that maintains a 75% weight on stock A and a 25% weight on stock B. a. What is the return each year of this portfolio? b. Based on your results from part (a), compute the average return and volatility of the portfolio. c. Show that (i) the average return of the portfolio is equal to the (weighted) average of the average returns of the two stocks, and (ii) the volatility of the portfolio equals the same result as from the calculation in Eq. 11.9. d. Explain why the portfolio has a lower volatility than the average volatility of the two stocks. Question content area bottom Part 1 a. What is the return each year of this portfolio? Enter the return of this portfolio for each year in the table below: (Round to two decimal places.) Year 2010 2011 2012 2013 2014 2015 Portfolio enter your response here% enter your response here% enter your response…

Using the data in the following table, and the fact that the correlation of A and B is 0.52, calculate the volatility (standard deviation) of a portfolio that is 50% invested in stock A and 50% invested in stock B. (Click on the following icon in order to copy its contents into a spreadsheet.) Realized Returns Year 2008 2009 2010 2011 2012 2013 Stock A -3% 11% 5% -3% ► 2% 9% Stock B 15% 22% 8% - 5% -15% 15% .... The standard deviation of the portfolio is%. (Round to two decimal places.)

Answer 2

Question

Chapter 11, Problem 14P

a)

Summary Introduction

To determine: The annual returns for a portfolio.

Introduction:

Return is a loss or gain incurred on the investment made by the investors. It is expressed in terms of percentage.

b)

Summary Introduction

To determine: The lowest annual return of the portfolio and comparisons between the lowest annual return of the individual stock or portfolios.

Introduction:

Portfolio refers to a set of financial investments owned by the investor. The portfolio of investments includes debentures, stocks, bonds, and mutual funds.

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Answer 3

Question

Chapter 11, Problem 14P

a)

Summary Introduction

To determine: The annual returns for a portfolio.

Introduction:

Return is a loss or gain incurred on the investment made by the investors. It is expressed in terms of percentage.

b)

Summary Introduction

To determine: The lowest annual return of the portfolio and comparisons between the lowest annual return of the individual stock or portfolios.

Introduction:

Portfolio refers to a set of financial investments owned by the investor. The portfolio of investments includes debentures, stocks, bonds, and mutual funds.

Expert Solution & Answer

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Answer 4

Question

Chapter 11, Problem 14P

a)

Summary Introduction

To determine: The annual returns for a portfolio.

Introduction:

Return is a loss or gain incurred on the investment made by the investors. It is expressed in terms of percentage.

b)

Summary Introduction

To determine: The lowest annual return of the portfolio and comparisons between the lowest annual return of the individual stock or portfolios.

Introduction:

Portfolio refers to a set of financial investments owned by the investor. The portfolio of investments includes debentures, stocks, bonds, and mutual funds.

Expert Solution & Answer

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Answer 5

Chapter 11, Problem 14P

a)

Summary Introduction

To determine: The annual returns for a portfolio.

Introduction:

Return is a loss or gain incurred on the investment made by the investors. It is expressed in terms of percentage.

b)

Summary Introduction

To determine: The lowest annual return of the portfolio and comparisons between the lowest annual return of the individual stock or portfolios.

Introduction:

Portfolio refers to a set of financial investments owned by the investor. The portfolio of investments includes debentures, stocks, bonds, and mutual funds.

Answer 6

Chapter 11, Problem 14P

a)

Summary Introduction

To determine: The annual returns for a portfolio.

Introduction:

Return is a loss or gain incurred on the investment made by the investors. It is expressed in terms of percentage.

Answer 7

Chapter 11, Problem 14P

a)

Summary Introduction

To determine: The annual returns for a portfolio.

Introduction:

Return is a loss or gain incurred on the investment made by the investors. It is expressed in terms of percentage.

Answer 8

b)

Summary Introduction

To determine: The lowest annual return of the portfolio and comparisons between the lowest annual return of the individual stock or portfolios.

Introduction:

Portfolio refers to a set of financial investments owned by the investor. The portfolio of investments includes debentures, stocks, bonds, and mutual funds.

Answer 9

b)

Summary Introduction

To determine: The lowest annual return of the portfolio and comparisons between the lowest annual return of the individual stock or portfolios.

Introduction:

Portfolio refers to a set of financial investments owned by the investor. The portfolio of investments includes debentures, stocks, bonds, and mutual funds.

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. 11.1 - What is a portfolio weight?Ch. 11.1 - How do we calculate the return on a portfolio?Ch. 11.2 - What does the correlation measure?Ch. 11.2 - How does the correlation between the stocks in a...Ch. 11.3 - Prob. 1CC Ch. 11.3 - Prob. 2CC Ch. 11.4 - Prob. 1CC Ch. 11.4 - Prob. 2CC Ch. 11.4 - Prob. 3CC Ch. 11.5 - What do we know about the Sharpe ratio of the...

The annual returns for a portfolio. Introduction: Return is a loss or gain incurred on the investment made by the investors. It is expressed in terms of percentage.

Solution Summary: The author explains the Excel formula to calculate the annual returns for a portfolio and compares the lowest annual return of the individual stock or portfolios.

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To determine: The annual returns for a portfolio.

Introduction:

Return is a loss or gain incurred on the investment made by the investors. It is expressed in terms of percentage.

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Chapter 11 Solutions

The annual returns for a portfolio. Introduction: Return is a loss or gain incurred on the investment made by the investors. It is expressed in terms of percentage.

Solution Summary: The author explains the Excel formula to calculate the annual returns for a portfolio and compares the lowest annual return of the individual stock or portfolios.

Videos

To determine: The annual returns for a portfolio. Introduction: Return is a loss or gain incurred on the investment made by the investors. It is expressed in terms of percentage.

Want to see the full answer?

Chapter 11 Solutions

To determine: The annual returns for a portfolio.

Introduction:

Return is a loss or gain incurred on the investment made by the investors. It is expressed in terms of percentage.